The Libery Times Editorial: Chinese inroads spell disaster

The sectors that have been deregulated are the very ones that are struggling, the SMEs. China has the advantage in human resources, and as soon as Chinese companies are allowed to operate in Taiwan, our own local low-capital, labor-intensive businesses — hair salons, breakfast cafes, launderettes and cleaners — will find it very difficult to compete and stay afloat.

Furthermore, an investment of US$300,000 entitles a Chinese company’s proprietor and two managerial personnel to relocate to Taiwan. For every additional investment of US$500,000, an extra staffer is permitted, up to a maximum of seven. The problem is, once the Taiwanese side has officially confirmed the size of the initial investment, the Chinese investors are free to take it back, making the investment clause an open door for Chinese immigration.

In other words, once the service trade agreement has been signed, Chinese personnel, products and services will be able to make substantial inroads into Taiwan, which will be disastrous for our economy.

Despite this, the sections of the media that Ma has in his back pocket are singing a chorus of consent, attacking dissenters for so-called provincialism and ideological intransigence. They are browbeating the public by saying that if they oppose exchanges with China, it will only lead to Taiwan’s further marginalization and that dire economic consequences for the foreseeable future will eventuate as a result of failing to ride the tail of the Chinese dragon.

In fact, the opposite is true. Taiwanese companies have been relocating to China and investing as much as US$200 billion, making us over-reliant on the China market. The problem is more how Taiwan can extricate itself from this reliance. Stagnant or falling salaries and persistent rising unemployment are a direct consequence of this reliance.

Some commentators are saying that since China has deregulated more industries than Taiwan, we are the true beneficiaries of this pact. However, China’s deregulation does not mean there are no obstacles to Taiwanese companies: There will still be layer upon layer of domestic laws, serving as invisible barriers to entry and preventing Taiwanese companies from enjoying promised benefits.

In addition, there are a number of Taiwanese SMEs that the government should protect from external competition. They will not be able to compete with China’s nationalized companies, which care more about increasing their market share than they do about profits.

In his pursuit of eventual unification, Ma is intent on destroying both. This is why he has pushed for this services trade agreement and the establishment of representative offices on either side of the Taiwan Strait.

Both are major steps in laying the foundations for economic and political unification, with eventual unification as the ultimate goal.

If that day comes, Taiwanese will be in real trouble. They will rue the day they allowed it to happen.